The chairman of the Federal Reserve, Jerome Powell, says the U.S. economy is very strong, but it's facing high inflationary pressures.
Testifying on Capitol Hall on Tuesday, Chairman Powell said the Fed could possibly accelerate the tapering of its asset purchases.
Kim Hyo-sun has more.
Federal Reserve Chairman Jerome Powell has signaled the possibility of an earlier end to the withdrawal of the Fed's massive asset purchase program that was put in place for pandemic support.
Speaking before the U.S. Senate Banking Committee on Tuesday Powell explained the issue will be addressed at the Fed's next policy-setting committee meeting slated for mid-December.
He said the country's economy remains very strong with higher inflationary pressures.
"But at this point, the economy is very strong and inflationary pressures are high, and it is therefore appropriate, in my view, to consider wrapping up the taper of our asset purchases, which we actually announced at a November meeting, perhaps a few months sooner."
The Fed is currently scheduled to complete its asset-purchases in mid-2022 under a plan announced last month to slow buying by 15 billion U.S. dollars a month.
If the Fed decides to speed up tapering earlier than schedule in Spring next year this could give it leeway to raise interest rates anytime thereafter.
Powell, who was selected last week by President Biden for another four year term, also explained that the emergence of the Omicron variant could pose downside risks.
"The recent rise in COVID-19 cases and the emergence of the omicron variant pose downside risks to the employment and economic activity and increased uncertainty for inflation. Greater concerns about the virus could reduce people's willingness to work in person, which would slow progress in the labor market and intensify supply chain disruptions."
He added the new variant could also worsen supply chain disruptions.
Such comments imply the Omicron variant may complicate the Fed's next steps creating further uncertainties.
Treasury Secretary Janet Yellen also testified, praising the passage of the infrastructure bill but warned a failure to increase the debt limit will have a significant impact on the U.S. economy.
Kim Hyo-sun, Arirang News.